Bitcoin held the $23,000 level surprisingly well given the news that Elon Musk sold 75% of bitcoin holdings on the Tesla balance sheet. Bitcoin traded close to the 50-day exponential moving average (EMA) but is yet to surpass it.
The shocking news of Tesla selling over 75% of its bitcoin holdings had some analysts doubt if bitcoin’s week-long rally would continue. But for the most part, the market remained unaffected by Musk’s actions. It seems like Bitcoin has grown up, and is less dependent on what certain Bitcoin whales do.
Bitcoin just survived the collapse of Luna, Three Arrows Capital and Celsius, so the news of Musk selling a large part of Tesla’s holdings left the remaining, high-conviction bitcoin holders largely unaffected. Many analysts believe we could continue seeing an upward trend in the short-term, given how well bitcoin has been holding the line despite Tesla removing a majority of their bitcoins from its balance sheet.
Bitcoin Might Continue Bullish Upward Trend
The price fell from the $23,000 level and traded slightly above the $22,000 level for the past few days, it then broke above resistance near $22,750. With the current bitcoin price trading over $23,000 the next key resistance is near the $23,880 zone and a close above this resistance zone could put bitcoin on a path of further gains in the short-term. If bitcoin continues rallying above this level, we could see bitcoin’s price rise towards the $24,250 level and the next resistance would be near the $25,000 level.
Some analysts believe we could go as high as $30,000, but it’s always important to not just look at charts but also the macroeconomic environment.
The hope now is that Bitcoin clears the $23,880 resistance zone because if it fails to do so, we could see a downside correction. Bitcoin could drop to the next support level at $22,500 and if it closes below that level we could see the price falling towards $21,450 or even as low as $21,000.
Does Bitcoin Need Tesla’s Backing?
With a second consecutive daily decline in bitcoin’s price following a week-long rally, some are speculating that Tesla CEO Elon Musk still has too much influence over short-term bitcoin price movements. Over the past two years Musk’s statements concerning bitcoin have sent markets both soaring and plunging.
Oanda Americas Senior Analyst, Edward Moya, wrote in an email that news of Telsa’s reported earnings and bitcoin sale might have put an end to the potentially meaningful breakout that bitcoin could have had.
Some analysts believe that Tesla’s bitcoin sale was a reasonable tactic for raising cash for corporate purposes. They have chosen to take Musk by his word and believe his reasoning for selling Tesla’s bitcoin, as well as his openness to purchase more bitcoin in the future. Overall, Musk’s outlook on bitcoin does not seem to have changed.
With the idea in place that bitcoin can be a better long-term store of value, especially as more regulations are being passed by Congress, the amount of corporations expected to hold a small percentage of bitcoin on their balance sheet to diversify is likely to increase.
The current price and Elliot wave count is showing that contrary to the widespread belief, bitcoin’s price is unfazed by Elon Musk and might continue to increase. Bitcoin has likely begun a new upward trend and has completed the first wave of this increase.
